OT:RR:CTF:EPDR H333226 ND
Category: Entry
Center Director
Industrial and Manufacturing Materials
Center of Excellence and Expertise
U.S. Customs and Border Protection
Buffalo Field Office
Buffalo, NY 14225
Attn: Jing Shan Chen, Import Specialist
Re: Application for Further Review of Protest Number 530120103202; Antidumping Duties; Xanthan Gum from the People's Republic of China; A-570-985; Enforce and Protect Act; 19 U.S.C. 1517(e); 19 C.F.R. 165.24(b); 19 U.S.C. 1673b; 19 U.S.C. 1504(d)
Dear Center Director:
The purpose of this decision is to address the application for further review ("AFR") of protest number 530120103202 filed by Crude Chem Technology LLC ("Crude Chem") on April 8, 2020, regarding the liquidation of entry numbers XXX-XXXX260-5 and XXX-XXXX153-1.
FACTS:
Between January 6, 2019, and March 6, 2019, Crude Chem entered two entries, numbers XXX-XXXX260-5 and XXX-XXXX153-1, of xanthan gum. According to the entry summaries (U.S. Customs and Border Protection ("CBP") Form 7501), the country of export and origin of the imported xanthan gum was India. Additionally, the Automated Commercial Environment ("ACE") identifies Chem Fert Chemicals ("Chem Fert") as the manufacturer with respect to entry number XXX-XXXX260-5 and Alfa Exim India ("Alfa") as the manufacturer with respect to entry number XXX-XXXX153-1.
Upon review of the entry documentation, CBP determined that the country of origin of the imported xanthan gum was the People's Republic of China ("China"), not India. Xanthan gum from China is subject to the antidumping duty ("ADD") order in case number A-570-985 ("ADD order"). See Xanthan Gum from the People's Republic of China: Amended Final Determination of Sales at Less Than Fair Value and Antidumping Order, 78 Fed. Reg. 43,143 (July 19, 2013); see also U.S. Department of Commerce ("Commerce") Message No. 3161301 (June 10, 2013). As a result, CBP suspended liquidation of entry number XXX-XXXX260-5 on February 11, 2019, and later suspended liquidation of entry number XXX-XXXX153-1 on April 1, 2019. Suspension of liquidation notices were automatically uploaded on the CBP website.
On May 7, 2019, CBP initiated an investigation under Title IV, Section 421 of the Trade Facilitation and Trade Enforcement Act of 2015, commonly referred to as the Enforce and Protect Act ("EAPA"), to determine whether Crude Chem, among others, evaded the ADD order. Additionally, CBP enacted interim measures that rate adjusted all of Crude Chem's entries to reflect the applicability of the ADD order and demanded cash deposits. CBP also noted it would suspend liquidation of Crude Chem's entries entered on or after May 7, 2019, and extend liquidation for all unliquidated entries that entered before this date. According to ACE, neither entry was affected by these interim measures. On August 12, 2019, CBP notified Crude Chem that it was commencing a formal EAPA investigation to determine whether Crude Chem was evading the ADD order.
On September 23, 2019, Commerce directed CBP to liquidate entries of xanthan gum from China entered for consumption between July 1, 2018, and June 30, 2019, at the cash deposit rate in effect on the date of entry. See Message No. 9266303; see also Message No. 9032306 (Feb. 1, 2019). The liquidation instructions further directed CBP to continue suspending liquidation of subject entries exported by certain entities. Id. Neither Chem Fert nor Alfa were named as exporters for whom liquidation was to remain suspended. Id.
On September 26, 2019, CBP issued a notice of action (CBP Form 29) notifying Crude Chem that its entries were subject to the ADD order in case number A-570-985 and ADD cash deposits of 154.07% were required. CBP subsequently liquidated Crude Chem's entries on October 11, 2019, with the assessment of ADD at the China-wide rate of 154.07% per Message 9266303. See also Commerce Message No. 9032306 (Feb. 1, 2019).
On March 9, 2020, CBP determined that there was substantial evidence that Crude Chem entered xanthan gum from China through evasion by transshipping the xanthan gum through India. In its notice of evasion to Crude Chem, CBP stated that it would continue to suspend liquidation for any entry imported by Crude Chem on or after May 7, 2019, and continue to extend liquidation for all unliquidated entries that entered before May 7, 2019, until it received liquidation instructions from Commerce.
Crude Chem filed protest number 530120103202 on April 8, 2020, protesting the liquidation of its entries. According to Crude Chem, CBP was required to extend liquidation for unliquidated entries entered before the date of the EAPA investigation pursuant to 19 U.S.C. 1517(e)(2) and 19 C.F.R. 165.24(b)(1)(ii), but CBP failed to do so with respect to entry numbers XXX-XXXX260-5 and XXX-XXXX15301. Therefore, Crude Chem argues that CBP prematurely liquidated entry numbers XXX-XXXX260-5 and XXX-XXXX15301. According to CBP, the entries were properly liquidated in accordance with the liquidation instructions from Commerce in Message 9032306.
ISSUE:
Whether CBP prematurely liquidated entry numbers XXX-XXXX260-5 and XXX-XXXX153-1.
LAW AND ANALYSIS:
As an initial matter, we note that this protest was timely filed. Pursuant to 19 U.S.C. 1514(c)(3)(A), a party must file a protest within 180 days after the date of liquidation. CBP liquidated the entries on October 11, 2019. Crude Chem filed its protest on April 8, 2020, within 180 days of this liquidation date. This protest also meets the criteria for further review. Specifically, it raises questions of law and fact concerning the premature liquidation of entry numbers XXX-XXXX260-5 and XXX-XXXX153-1, which have not been ruled upon by the Commissioner of CBP or his designee or by the Customs courts. 19 C.F.R. 174.24(b).
Crude Chem filed protest number 530120103202 on April 8, 2020, protesting the liquidation of its entries. According to Crude Chem, CBP was required to extend liquidation for unliquidated entries entered before the date of the EAPA investigation pursuant to 19 U.S.C. 1517(e)(2) and 19 C.F.R. 165.24(b)(1)(ii), but CBP failed to do so with respect to entry numbers XXX-XXXX260-5 and XXX-XXXX15301. Therefore, Crude Chem argues that CBP prematurely liquidated entry numbers XXX-XXXX260-5 and XXX-XXXX15301.
While both CBP and Commerce play a part in the enforcement of ADD laws, their roles are separate and distinct. Pursuant to 19 U.S.C. 1673b(d)(2), once Commerce makes an affirmative final determination of dumping, it orders CBP to suspend "liquidation of all entries of merchandise subject to the determination which are entered . . . . for consumption." Thereafter, Commerce instructs Customs to liquidate entries. See Mitsubishi Elecs. Am. Inc. v. United States, 44 F.3d 973, 977 (Fed. Cir. 1994). "Customs merely follows Commerce's instructions in assessing and collecting duties." Id. Customs cannot "modify Commerce's determinations, their underlying facts, or their enforcement." Id. (quoting Royal Bus. Machs. Inc. v. United States, 507 F. Supp. 1007, 1014 n.18 (Ct. Int'l Trade 1980)). Customs plays a "merely ministerial role in liquidating antidumping duties." Id. at 977. "Customs should do no more than enact the intentions of Commerce." See e.g., Shinyei Corp. of Am. v. United States, 2011 Ct. Int'l Trade LEXIS 65, *10 (June 15, 2011). When a suspension required by statute or court order is removed, CBP must liquidate the entry, unless liquidation is extended, within six months after receiving a notice of removal from Commerce. 19 U.S.C. 1504(d).
Moreover, Customs laws direct CBP to "take enforcement actions against the evasion of ADD and countervailing duties ("CVD") orders, which include the assessment of civil penalties against importers who evade such orders." Investigation of Claims of Evasion of Antidumping and Countervailing Duties, 81 Fed. Reg. 56,477 (Aug. 22, 2016). EAPA investigations are governed by 19 U.S.C. 1517. The EAPA statute directs CBP to initiate an investigation within 15 business days of receipt of an allegation that "reasonably suggests that covered merchandise has been entered into the Customs territory of the United States through evasion." 19 U.S.C. 1517(b)(1). "Covered merchandise" is merchandise that is subject to an ADD or CVD order pursuant to 19 U.S.C. 1673e or 19 U.S.C. 1671e, respectively. 19 U.S.C. 1517(a)(3). "Evasion" is defined as:
Entering covered merchandise into the Customs territory of the United States by means of any document or electronically transmitted data or information, written or oral statement, or act that is material and false, or any omission that is material, and that results in any cash deposit or other security or any amount of applicable [ADD] or [CVD] being reduced or not being applied with respect to the merchandise.
19 U.S.C. 1517(a)(5)(A).
CBP is authorized to impose interim measures pursuant to 19 U.S.C. 1517(e). The statute provides:
. . . . if the Commissioner decides there is such a reasonable suspicion [of evasion], the Commissioner shall-
(1) suspend the liquidation of each unliquidated entry of such covered merchandise that entered on or after the date of the initiation of the investigation;
(2) pursuant to the Commissioner's authority under section 1504(b) of this title, extend the period for liquidating each unliquidated entry of such covered merchandise that entered before the date of the initiation . . . .
19 U.S.C. 1517(e); see also 19 C.F.R. 165.24.
As explained, 19 U.S.C. 1517(e) and 19 C.F.R. 165.24(b)(1)(ii) instruct CBP to extend the liquidation of any unliquidated entry covered by the scope of an EAPA investigation and entered before the initiation date. Here, CBP imposed interim measures stating that it would extend liquidation of all Crude Chem's entries that remained unliquidated prior to the May 7, 2019, initiation of the EAPA investigation. Prior to the initiation of the investigation and imposition of the interim measures, though, CBP suspended liquidation of entry number XXX-XXXX260-5 on February 11, 2019, and entry number XXX-XXXX153-1 on April 1, 2019. While we agree that CBP is statutorily required to extend rather than suspend liquidation of unliquidated entries entered prior to the initiation of an EAPA investigation pursuant to 19 U.S.C. 1517(e), this distinction is of no legal consequence in this case.
Commerce directed CBP to suspend liquidation of entries of xanthan gum from China entered for consumption on or after July 13, 2013. See 78 Fed. Reg. 43,143 (July 19, 2013); see also Message No. 3161301 (June 10, 2013). Once Commerce affirmed its preliminary determination of dumping, it directed CBP to suspend liquidation of entries subject to the ADD order. Id. As a result, CBP suspended liquidation of entry numbers XXX-XXXX260-5 and XXX-XXXX153-1 pursuant to 19 U.S.C. 1673b(d)(2), prior to the initiation of the EAPA investigation. The purpose of an EAPA investigation is for CBP to take enforcement actions against the evasion of an ADD order, such as the ADD order on xanthan gum from China. See 81 Fed. Reg. 56,477 (Aug. 22, 2016). With respect to entry numbers XXX-XXXX260-5 and XXX-XXXX153-1, CBP independently determined that these entries were subject to the ADD order and suspended liquidation of both entries as required by statute, notwithstanding the EAPA investigation which began shortly thereafter. Additionally, we note that 19 U.S.C. 1517(e) is silent as to the treatment of entries for which CBP has already suspended liquidation subject to an ADD order prior to the initiation of an EAPA investigation. Accordingly, CBP properly suspended liquidation of entry numbers XXX-XXXX260-5 and XXX-XXXX153-1.
Moreover, Commerce directed CBP to liquidate entries of xanthan gum from China entered for consumption between July 1, 2018, and June 30, 2019, at the cash deposit rate in effect on the date of entry. See Message No. 9266303 (Sept. 23, 2019). The liquidation instructions further directed CBP to continue suspending liquidation of subject entries exported by certain entities, but neither exporters Chem Fert nor Alfa were enumerated entities for which suspension remained in place. Id. Crude Chem has not articulated any grounds as to why these liquidation instructions do not apply to its entries. Therefore, the liquidation instructions in Message 9266303 applied to Crude Chem's entries and CBP in its ministerial capacity was required to liquidate the entries within six months of these instructions pursuant to 19 U.S.C. 1504(d). The instructions in Message 9266303 would have similarly applied had CBP extended, rather than suspended, liquidation of entry numbers XXX-XXXX260-5 and XXX-XXXX153-1; CBP would have merely liquidated the entries per the instructions at a later date. Accordingly, CBP properly liquidated Crude Chem's entries in accordance with Commerce's liquidation instructions in Messages 9266303.
HOLDING:
Based on the foregoing, CBP did not prematurely liquidate entry numbers XXX-XXXX260-5 and XXX-XXXX153-1. CBP properly liquidated the entries in accordance with Commerce's liquidation instructions in Message 9266303. The protest should be DENIED in full.
You are instructed to notify the Protestant of this decision no later than 60 days from the date of this decision. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to this notification. Sixty days from the date of the decision, the Office of Trade, Regulations and Rulings will make the decision available to CBP personnel and the public on the Customs Rulings Online Search System ("CROSS") at https://rulings.cbp.gov/, or other methods of public distribution.
Sincerely,
For Yuliya A. Gulis, Director
Commercial and Trade Facilitation Division